FX.co ★ Trading idea for gold

The upcoming US presidential election is clearly putting pressure on gold with its unprecedented support to the US dollar.

This can be seen through the sluggish bullish trend that has been occurring in the asset for several weeks already, during which short positions are regularly "taken out" by the sharp price jumps that update the peaks of the previous days.

This scenario is what we call a "stretched market", which, in most cases, is unloaded against its trend.

Whether this breakout will be true or false is not clear yet, but the fact that such a pattern is formed in one of the most adjustable and volatile instruments is not without reason.

So, taking into account this situation, the best strategy is to open short positions, aiming for an update to two extremes: 1872 and 1848. This would follow the classic Price Action and Stop Hunting techniques.

Of course, the risk should be controlled to avoid losing profit. Trading in this market, as we know, is very precarious and uncertain, but also very profitable if we use the right approach.

Good luck!